Copper Thefts in Chile Linked to China

Copper Thefts in Chile Linked to China

By Juan Delgado / Diálogo
March 19, 2020

In mid-January 2020, Chilean security forces made the largest seizure of contraband copper, about 80 tons estimated at $305 million, found in a junkyard of the Lampa community, 22 miles northwest of Santiago de Chile. Chile’s Investigations Police (PDI, in Spanish) said in a press conference that the metal was bound for China.

The finding, one of a growing number of copper thefts in Chile, shows that the smuggling may be motivated by the high demand in China, said in a late January report by the organization InSight Crime, which specializes in security threats in Latin America and the Caribbean. “The country [China] has a track record of soaking up global copper production, both legally and illegally,” the report said.

“The great expansion of Chinese companies in telecommunications, networks, 5G, etc., means an increase in the demand for copper and its derivatives to meet the demands of businesses in third markets,” Sergio Cesarín, coordinator of the Center for Studies on Asia-Pacific and India at the University of Tres de Febrero in Buenos Aires, Argentina, told Diálogo.

Cesarín described copper smuggling as a large-scale transnational criminal activity, with several actors involved in Chile, from thieves, operators, domestic shipping networks to national companies. In China, it is likely “a complex operation,” where “criminal rings, companies, and public officials might be involved […]. It intertwines responsibilities and corruption up and down the chain.”

Martín Verrier, professor of international relations at the University of Belgrano in Buenos Aires, explained that this metal is an essential commodity for the Asian country’s industrial base, which is used in the electrical, electronic, telecommunications, and construction industries, among others. According to the International Copper Study Group (ICSG), a raw materials intergovernmental organization, China is the world’s largest importer of copper, with almost 5 million tons imported in 2019. Chile, ICSG indicates, is the largest exporter in the world, with China being its main commercial partner for the metal.

“This increasing demand explains why copper prices rose to more than $6,200 per ton at the end of 2019 […],” said Verrier. “Consequently, and similarly to gold, criminal organizations find in copper smuggling an advantageous market.”

PDI said on its Twitter account that the copper seized in January had been stolen from electric and telecommunication companies. Complaints filed by the affected companies — which lost copper cables to thieves all over the country — and PDI investigations led to an operation that resulted in the historic seizure and the arrest of the owner of the company that collected the copper.

Months before, in October 2019, PDI recovered more than 10 tons of smuggled copper, estimated at $55 million, in various companies in the city of Antofagasta, capital of the northern region of the same name and a mining area known for copper production. Several trains transporting copper extracted from the mines in the region were also attacked. According to the Argentine newspaper Mining Press, which focuses on mining in Argentina, Chile, and Peru, the Antofagasta Prosecutor’s Office had reported six attacks on copper trains in 2014, but in 2018, attacks increased to 48.

“They can attack a train anywhere simply by placing obstacles on the tracks. They climb up, cut the supports holding the cathodes, and load them up onto trucks specially adapted to take the weight,” PDI agent Luis Millapán told the Bloomberg news agency in a February 2019 article. “They use high-frequency radios and special clothing to withstand the frozen temperatures of the [Atacama] desert, and they know the area like the back of their hand.”

The Antofagasta region has experienced so many robberies, that in August 2018 the PDI created a special unit to counter this crime; Millapán leads the unit. According to Bloomberg, within the first six months of its creation the unit was successful, seizing about 60 tons of copper and arresting 11 people.